Abstract for: Electrifying Away Climate Change: Interactions of Heat Pump Installation Capacity, Adoption, and Grid Load in Massachusetts

The transition to heat pumps for residential heating is a crucial strategy in addressing climate change. Despite their efficiency and emissions benefits, adoption remains low due to high upfront costs, limited installer capacity, and consumer awareness gaps. Additionally, concerns about grid load during winter peak demand present challenges. This study uses a dynamic behavioral model to explore high-leverage policies that enhance heat pump adoption while mitigating grid impacts in Massachusetts. We develop a behavioral dynamic model that accounts for the interactions between heat pump demand, supply, installation capacity, consumer decision-making, and policy interventions. The model incorporates economic constraints, behavioral biases, and delays in perception of costs and subsidies. It is parameterized using Massachusetts-specific data to simulate the impact of different policy levers, including subsidies, installer training programs, and stricter housing efficiency codes, on adoption rates and grid demand. Findings indicate that increasing installer training capacity is the most effective policy for accelerating adoption. However, this leads to increased winter peak grid demand, which can be mitigated through stringent energy efficiency codes. The effectiveness of targeting installation capacity is due to a reinforcing feedback loop between increasing heat pump attractiveness and capacity, analogous to the market growth model. Sensitivity analysis suggests these results are robust to parameter uncertainty. Our results suggest that climate policies such as the Inflation Reduction Act may provide too much funding for consumer rebates and too little on the installers of green technologies. Future research should explore behavioral factors influencing installers and consumers, especially more detailed modeling work on installer training. AI was used to suggest phrasing and write the initial draft of the abstract and the structured abstract.